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This chapter is covered by the Auditors' Report.

C16 Equity

Capital stock 2008

Capital stock at December 31, 2008, consisted of the following:

Parent Company Number of shares Capital stock
Class A shares 261,755,983 1,309
Class B shares 2,984,595,752 14,923
Total 3,246,351,735 16,232

The capital stock of the Company is divided into two classes: Class A shares (quota value SEK 5.00) and Class B shares (quota value SEK 5.00). Both classes have the same rights of participation in the net assets and earnings of the Company. Class A shares, however, are entitled to one vote per share while Class B shares are entitled to one tenth of one vote per share.

At December 31, 2008, the total number of treasury shares was 61,066,097 (46,398,3091) in 2007 and 50,202,7781) in 2006) Class B shares. There were 19,900,000 shares repurchased by Ericsson in 2008, due to delivery and sale of shares in relation to the Stock Purchase Plans and the Stock Option Plans.

Reconciliation of number of shares
Number of shares Capital stock
Number of shares Jan 1, 2008 3,226,452,736 1) 16,132
Number of shares Dec 31, 2008 3,246,351,735 16,232
1) The Annual Meeting on April 9, 2008, decided on a reverse split 1:5 of the Company’s shares. The reverse split has the effect that five shares of Class A and five shares of Class B, respectively, are consolidated into one share of Class A and one share of Class B, respectively. Numbers of shares and earnings per share for comparison periods have been restated accordingly.

Dividend proposal

The Board of Directors will propose to the Annual General Meeting 2009 a dividend of SEK 1.85 per share.

Additional paid in capital

Relates to payments made by owners and includes share premiums paid.

Revaluation of other investments in shares and participations

The fair value reserve comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognized or impaired.

Cash flow hedges

The cash flow hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash-flow-hedging instruments related to hedged transactions that have not yet occurred.

Cumulative translation adjustments

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, changes regarding revaluation of goodwill in local currency as well as from the translation of liabilities that hedge the Company’s net investment in foreign subsidiaries.

Retained earnings

Retained earnings, including net income for the year, comprise the earned profits of the Parent Company and its share of net income in subsidiaries, joint ventures and associated companies.

2008 Capital stock Addi-
tional
paid in capital 		Revalua-
tions of
other invest-
ments in shares
and partici-
pations 		cash flow hedges Cumula
tive
transla-
tion
adjust-
ments 		Retained earnings Stock-
holders' equity 		Minority interests Total equity
January 1, 2008 16,132 24,731 5 307 -6,345 99,282 134,112 940 135,052
Actuarial gains and losses related to pensions
Group – – – – – –4,019 –4,019 – –4,019
Joint ventures and associates – – – – – 4 4 4
Revaluation of other investments in shares and participations
Fair value measurement reported in equity
Group – – –6 – – – –6 – –6
Joint ventures and associates – – –1 – – – –1 – –1
Cash flow hedges
Fair value remeasurement of derivatives reported in equity
Group – – – –5,116 – – –5,116 – –5,116
Joint ventures and associates – – – 36 – – 36 – 36
Transferred to income statement for the period – – – 1,1921) – – 1,192 – 1,192
Changes in cumulative translation adjustments
Group – – – – 7,081 2) – 7,081 233 7,314
Joint ventures and associates – – – – 1,214 – 1,214 – 1,214
Tax on items reported directly in/or transferred from equity – – 1 1,225 174 3) 930 2,330 – 2,330
Total transactions reported directly in equity – – –6 –2,663 8,469 –3,085 2,715 233 2,948
Net income
Group – – – – – 11,564 11,564 394 11,958
Joint ventures and associates – – – – – –291 –291 – –291
Total income and expenses recognized for the period – – –6 –2,663 8,469 8,188 13,988 627 14,615
Stock issue 100 – – – – – 100 – 100
Sale of own shares – – – – – 88 88 – 88
Repurchase of own shares – – – – – –100 –100 – –100
Stock Purchase and Stock Option Plans
Group – – – – – 589 589 – 589
Joint ventures and associates – – – – – – – – –
Dividends paid – – – – – –7,954 –7,954 –286 –8,240
Business combinations – – – – – – – –20 –20
December 31, 2008 16,232 24,731 –1 –2,356 2,124 100,093 140,823 1,261 142,084
1) SEK 416 million is recognized in Net Sales and SEK 776 million is recognized in Cost of Sales.
2) Changes in cumulative translation adjustments include changes regarding revaluation of goodwill in local currency of SEK 2,993 million (SEK –914 million in 2007, SEK –701 million in 2006), gain/loss from hedging activities of foreign entities, SEK –660 million (SEK –52 in 2007, SEK 123 million in 2006) and SEK 13 million (SEK –70 million in 2007, SEK –1 million in 2006) of realized gain/losses net from sold/liquidated companies.
3) Deferred tax on gains/losses on hedges on investments in foreign entities.